Consumer Attitude towards Behavioral Targeting

A recent report titled Behavioral Targeting Attitudes:The Privacy Issue by eMarketer, explored consumers attitude towards online tracking and behavioral targeting. There was a similar study by TRUSTe in April. This report builds on that study and few other surveys and provides an analysis of the consumers attitude toward Behavioral Targeting.

The conclusion of this report was exactly what I have been advocating. According to the report

online marketers might do well to develop transparent methods of letting the audience know when and how their Web history data will be used, the benefits they can receive in exchange for allowing it to be used and a clear, easy opt-in mechanism for informed consent.

I shared similar views in my post titles 5 Step Process to Ease Privacy Concerns Regarding Behavioral Targeting.

The key question this report tackles are

• What will encourage people to accept more ad targeting?


• Are consumer privacy concerns a deal breaker for
  behavioral targeting?


• How much transparency will marketers need to allay
  consumer concerns?


• Are all methods of behavioral targeting data collection equal?


• Will the government limit how online companies can use
  consumer data?

Some of the highlights of this report are

1. Over 87% of the respondents to TRUSTe survey said that at least three quarter of the online ads are irrelevant


2. 41% of the users are more willing to pay attention to personalized advertising


3. 75% of internet users are interested in receiving personalized ads


4. 59% of the respondents to Harris Interactive Poll responded that they are not comfortable with ads or content targeted to their personal interests based on their internet usage

The above findings create an interesting dilemma for marketers. Consumers want relevant ads but are not comfortable with being tracked. However, it also provides an opportunity for Behavioral Targeting companies to step up and innovate new ways to provide relevant ads while easing the concern about tracking.

Marketers and privacy officer’s need to keep in mind that the negative attitude towards tracking and targeting is not limited to Behavioral Ad networks such as Tacoda and Revenue Science etc but it also applies to content targeting and on-site targeting provided by tools such as Test&Target by Omniture, Optimost/Interwoven etc.

You can get the full report at http://www.emarketer.com/Article.aspx?id=1006407

Comments?


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ISP based Behavioral Targeting

In an articles titled Watching What You See on the Web Wall Street Journal talks about ISP (Internet Service Provider) based behavioral targeting.

ISP based behavioral targeting idea has been kicked around for some time and NebuAd is one of the first company that made a product know as “deep-packet inspection boxes” for ISP to track user behavior online and then serve ads based on these behaviors.
This kind of targeting enables ISP’s to be a player in growing behavioral targeting market and generate a new stream of revenue.

This kind of technology is beyond simply using anonymous tracking. ISP do have a lot more information than just the browsing behavior. They have name, location, age, social security number (SSN). They know what time users login to their machine, when is the internet being used, what kind of sites are visited at what times, which sites provided information before a user made a purchase etc etc. This is far more information than companies like Revenue Science or Tacoda has and obviously can provide better targeting than Revenue Science or Tacoda can do.
However this also raises far more privacy concerns than companies like Revenue Science and Tacoda raise.

According to the article
The technology does raise privacy issues. The Internet-service providers often know other information about consumers, such as their names, locations and age and income ranges, which can be very valuable to potential advertisers, especially when combined with Web browsing habits. "Some of these [Internet equipment] guys are traveling in dangerous territory," says Emily Riley, an advertising analyst with Jupiter Research. "Should one company have all of that data in one place? It's a little troubling."


Other than user privacy there is another huge issue that this article did not talk about. In a network like Revenue Science or Tacoda publishers and advertisers (data providers) have to opt-in to participate. If a publisher/advertiser does not want to enable advertisers to use their data then they simply do not participate in the network. Advertisers can also choose to just use their site’s data to be used to only power their own advertisements. E.g Delta airlines can choose to participate in a retargeting campaign on a network like Revenue Science. They can retarget all the users who viewed fares to a particular destination but left the site without buying the ticket. To do so they will allow the network to collect information on all those users whom they want to target and then only allow the network to use those behaviors (users) to target their ads only. Alaska airlines cannot use Revenue Science and target their ads based on the behaviors on Delta airlines network. This is an explicit agreement between the publisher/advertiser and network.
However in case of ISP based targeting; data providers (publishers, advertisers and other sites) don’t have to opt in. They are opted in by default. Using the example above, a user’s behavior on Delta airlines site (and also information about who clicked on Delta’s ads across internet) is captured without Delta Airlines explicit approval. Now, ISP’s can use that information to power Alaska airlines advertisement and drive all those users, who could have purchased their tickets from Delta, to Alaska airlines. I am sure Delta won’t be happy about it. This applies to every single site on internet, they do not have an option their data will be used and in most cases to power competitors ads, this is a huge deal. I think it is, what do you think? I am sure there will be advertiser backlash too with this kind of technology.

It is also not clear to me if the ISPs will work with individual publishers or networks and provide behavioral data to power their ads on publishers inventory or if they will override publishers inventory with their own ads (which will probably cause sudden death of ISP based targeting) or if they will do popups (pop under) creating new inventory. NebuAd does however have a service for publishers where publishers can use their services on their own inventory, however I am not clear how ISPs plan to use it.

As I predicted earlier this year Behavioral Targeting has become a very common term among marketers. To cash in on this phenomenon a lot of new technologies and companies are springing up, I expect this trend to continue in 2008, we will see more innovation in coming month. Mobile and TV behavioral targeting is next in line too.

Questions/Comments?

Behavioral Targeting and Privacy

Behavioral Targeting and Online Privacy is taking an interesting turn. Yesterday I wrote about Privacy groups proposal to create “Do-Not-Track” for online behavioral targeting just like “Do-Not-Call” list to stop telemarketers from contacting the people on the list.

To counter these groups, AOL took a proactive step by announcing the launch of Privacy education program for Behaviorally Targeted Advertising.

AOL is doing exactly what I wrote in April of this year in an article related to privacy

"I believe that if consumers are provided proper education then they can in fact benefit from Behavioral Targeting. It will be a win-win situation for all the parties involved. Proper education and disclosures by advertisers, publishers and networks will ease the concerns regarding Behavioral Targeting. Consumers have the right to opt out of Behavioral Targeting but what is lacking is proper education on how to do so."

According to an AOL press release:

Program Will Provide Greater Transparency, Enhanced Notice of How Targeted Advertising Works, and Patent-Pending Technology to Protect Consumers' Opt-Out Choices; The Program Will Reach More Than 91% of Online Consumers


“Our goal with this program is to engender greater trust for targeted advertising by communicating with consumers in a more visible way, and by providing them more information about their choices,” said Curt Viebranz, President of Platform-A. “AOL believes that doing more to explain to users the choices they have over the way their data is used, and helping them exercise those preferences will help them feel more in control.”


I also wrote in the previous article:

“The networks currently opt-in users by default; however, in my opinion the proper process should be opt-out by default and opt-in if user chooses to opt-in, just like we do for emails and newsletters. This process will move the burden from users to the advertisers, publishers and networks.”

I don’t think we are going to get opt-in process in near future, here is what AOL talked about the opt-out process:

The expanded use of the TACODA opt-out technology will help better preserve consumer choices. Today, users who opt-out of behavioral targeting by using an opt-out cookie risk having their preference lost if they later delete their cookies. TACODA leverages a Web cache technique to preserve a consumers' opt-out choice even if they delete their browser cookies, something other opt-out systems cannot currently do. AOL is also exploring opportunities to license this technology on a royalty-free basis for use exclusively in consumer privacy protection programs.

“We want to make the opt-out process as simple and transparent as possible,” said Jules Polonetsky, Chief Privacy Officer, AOL. “We urge the industry to join us in ensuring that users who take steps to minimize the data they provide have their choices maintained.”

In another article titled “Online Marketers Joining Internet Privacy Efforts” NYTimes.com writes:

AOL says it is setting up a new Web site that will link consumers directly to opt-out lists run by the largest advertising networks. The site’s technology will ensure that people’s preferences are not erased later.
There is a silver lining for marketers, however: the AOL site will try to persuade people that they should choose to share some personal data in order to get pitches for products they might like. Most Web sites, including AOL, already collect data about users to send them specific ads — but AOL is choosing to become more open about the practice and will run advertisements about it in coming months.

I think this is a very smart move by AOL/Tacoda, if it can convince consumers about the benefit of Behavioral Targeting then why not take one step further and have these consumers provide more information about themselves.

Other posts that I recommend
1. Privacy
1. Behavioral Targeting

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Behavioral Targeting now playing on your TV

Well, don’t get alarmed yet but that’s the way future is going to look like. TV will (in near future) start showing Behaviorally Targeted ads. The idea is not new, it has been talked about for quite some time but Time Warners’ purchase of Tacoda has moved this idea a step closer to reality.

Here is an excerpt from iMedia Connection interview with Dave Morgan of Tacoda.

Recently on an analysts call, Time Warner COO Jeff Bewkes expressed enthusiasm for the targeting capabilities of the company's cable network. Can Tacoda's technology be applied to the cable platform or does it only function on a web platform?
We do believe that BT will be applied to cable networks and we have built our business and our technology with that future in mind. What we do on the PC we certainly intend to do for the TV.

How about mobile?
The same. What we do for the PC, we intend to do for the mobile device. Of course, since those systems are much less open and also may involve more personal data, this area may develop much slower.


The same concepts that are used today online to show Behaviorally Targeted ads will translate into TV (and other media e.g. mobile) as well. Based on what time of the day a user watches TV, what program she watches, how often she watches, weather she TiVo’s the programs and what programs, does she watches commercials or skips them everything will help segment users and better target the ads. Yes, there will be issues in exactly identifying what ad will make sense but with smart segmentation providers will be able to deliver the right ads to right viewers. For example, there are certain programs that I watch which my wife does not like, there are certain programs that my wife watches which I don’t watch and then there are others that we both watch. By putting both me and my wife (household) in one segment 1/3 of the time the advertiser will be wrong, still better than being 50% (or more) wrong. Now if they overlay other household information and find affinities between the programs watched and the time of the day and flipping of the channels (time a person stops on a particular channel before flipping again) etc, providers will be able to better segment the viewers and hence better target the Ads.
This is just the beginning, you will hear more and more about TV ad targeting in next 2 years.

So watch out for the Behavioral Targeted Ads coming to your TV.
Comments/Thoughts?

Consolidation in Behavioral Targeting Space: AOL buys Tacoda

In my 2007 Predictions I predicted
“Only few main behavioral network players will be left and some of the existing ones with poor networks will either go out of business or be sold.”

Well, since then we have seen consolidation in this market earlier this year, Google-Doubleclick, MSN-Aquantive, Yahoo-Rightmedia now the latest is AOL-Tacoda.
According to NYPost’s article Aol has an Eye on Your Business, AOL is moving into the behavorial-targeting ad market with a deal to purchase Behavioral Targeting Firm Tacoda.

“Tacoda, which will operate as a wholly owned AOL subsidiary, is one of several online ad firms that use "behavioral targeting" techniques to track Web surfers' habits. Through its so-called "Audience Network," Tacoda helps marketers tailor ads to individual users for such things as cars or computer equipment. “
“…While not referring to any company in particular, [Andy] Falco did concede to The Post that Tacoda "did have other choices, but they choose to come to AOL."

I am sure this puts Revenue Science (Tacoda’s biggest rival) in sort of an odd position because AOL was one of their biggest customers and were probably competing with Tocoda to be acquired by AOL.

Next acquisition target: Revenue Science. We will have to wait and see who buys them? Any takers? Valueclick?

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Behavioral Targeting: Audience of One

This morning Washington past had an article titled “Web Ads with An Audience of One” discussing the growing use of Behavioral Targeting.

I have been writing about
Behavioral Targeting since I started this blog and have been predicting growth of behavioral targeting. MSFT/aQuantive deal did not come a s a surprise to me, I expected it. Behavioral Targeting is going to be very prevalent especially now when all three MSFT, Google and Yahoo have built their capabilities are building them.

This article resurfaces the privacy concerns, as I wrote in my article Google Doubleclick Deal concerns Privacy Advocates the best way to deal with privacy is to move from opt-out to opt-in model.

…."I believe that if consumers are provided proper education (I will write about consumer benefits in one of my future posts) than they can infect benefit from Behavioral Targeting. It will be a win-win situation for all the parties involved. Proper education and disclosures by advertisers, publishers and networks will ease the concerns regarding Behavioral Targeting. Consumers have the right to opt out of Behavioral Targeting but what is lacking is proper education on how to do so. The networks currently opt-in users by default; however, in my opinion the proper process should be opt-out by default and opt-in if user chooses to opt-in, just like we do for emails and newsletters. This process will move the burden from users to the advertisers, publishers and networks.

In short run this could result in a lower reach for BT providers. But if the benefits to consumers are properly stated then most of the consumers will be willing to participate. If you (network or advertiser) tell a consumer that he/she does not need to go looking for deals or offers of products/services that he/she is in the market for, these deals/offers will be provided to him/her based on her online behavior no matter where in the network she is in, I think consumer will love it. If a consumer knows the process and she knows that she is willingly participating in the BT, the click-through rate on the ads will be higher too. Why force users into Behavioral Targeting and raise privacy concerns when you can offer them what they want (when they want) and make them your raving fans.

This article gives an example from DrivePM where a user who visits a hotel chain site but does not complete the booking can be reached at later point in time but this time the user gets a 10% off coupon as an incentive to complete the booking. Knowing the benefit won’t users allow networks to track them? I am sure those who see the value in this 10% will surely do. As I said above give users what they want and they will give you what you want. If users know that they can have offers tailored to their needs by just letting a network track them, chances are very good that users will let them do it. Users sign up for grocery card rewards program just to get few cents off then how is it different online? Let users decide what and how they want you to track.

One another note: I am puzzled by the quote from Curt Viebranz of Tacoda “…….. we’re literally collecting 10 Billion behaviors a day”. In my article titled Calculating Behaviors on your Site I questioned a similar quote from Revenue Science. Can somebody from Tacoda or Revenue Science please clarify how you calculate behaviors or quit using such meaningless stats.